Ownership of the back office system

While there are examples of this which have been highlighted in the press, Simon Bussy, principal consultant of Altus Consulting, says in his experience this concern is increasingly unfounded.

Mr Bussy says the most important elements of a client management system or other toolset, irrespective of who builds it, are:

• robust, compliant and agile software;

• the ability to integrate seamlessly with other pieces of software; and

• a clean and easy user experience.

Mr Bussy says: “An oft-quoted criticism of some of the technology ‘tools’ supported by certain platforms and life companies is that they have been ‘adjusted’ to give a forced or biased ‘answer’.

“Others, such as Zurich intermediary platform, took the decision before launch to fully integrate third party toolsets without any ‘fiddling’ with the calculations; they even retained the tool providers’ brand, to further demonstrate the toolset’s independence, and this stance has generally been welcomed by advisers.

“Increasingly, both the client management systems and toolsets are being configured and integrated to make the adviser journey and client journey more seamless and integrated – and as long as this is delivered in an objective way, rather than to bias the end result, then this evolution is to be applauded.

“We would argue that ownership of the technology is not important. But what is important is the primary objective is to engage the client and support them objectively and independently through their financial journey, and the different stages and events of their life.”

He added that the functionality should be robust, compliant, and keep pace with industry and wider technology developments.

Mr Bussy says: “The technologies should be seamlessly integrated, support data sharing and proper straight through processing. It should provide an easy, ‘feel good’ user experience and encourage the users to return time and again.”

Nick Eatock, executive chairman of Intelliflo, says it is important that there are no conflicts of interest as a result of the ownership of the back office system.

However he argues of equal importance is funding and the amount of revenue/profit that the owner of the system directs back to the product or service.

Mr Eatock says advisers should keep an eye on whether there are any diversions from the customer base either in the UK or overseas.

Whoever owns the software also determines the roadmap for the software, so Mark Loosmore, UK executive general manager wealth at Iress, says making the correct decision is critically important to making sure it is future proof.

He says there are some suppliers who are owned by, or have very strong links with, product providers or other market participants.

Other suppliers, meanwhile, stand outside of the value chain completely and simply provide the technology, Mr Loosmore notes.

He says there are pros and cons with owners taking either approach, depending on an individual firm’s circumstances and business model.

Mr Loosmore says: “The independently owned solution, may have greater appeal to independent adviser firms, allowing access to a wider variety of product offerings, with greater flexibility and guaranteed commitment to ongoing development of the solution.

“Fundamentally it comes down to picking the best software for your business.”